Offshore investing 101: Europe’s best low-tax countries
Switzerland, Malta, Estonia, Cyprus, Romania and friends: where your company and wealth grow best in Europe – with 2026 numbers, legally.
Andorra
Andorra taxes company profits at 10%, lets residents take dividends from their Andorran company tax-free, and has no wealth or inheritance tax. The catch: since 2026 you pay €50,000 non-refundable to get in, you have to live there for real, and flats are scarcer than parking spots.
Our verdict
Great if you run a real, location-independent business, want to live in the mountains 183+ days a year and can handle the €50,000 entry ticket. Skip it if you need EU residence rights, want to leave your company elsewhere, or are a German resident hoping to escape German tax without a proper plan – there’s no tax treaty with Germany, and the Finanzamt has a long memory.
Great for
- Online entrepreneurs who will genuinely live in Andorra and run an Andorran company
- Skiers, hikers and families who value safety (Numbeo 89) over city life
- Wealthy families wanting a low-tax, no-wealth-tax base next to Spain and France
Skip it if
- Anyone who wants to keep their company managed from abroad or spend most of the year elsewhere
- Budget movers – €50,000 non-refundable, high rents, limited housing
- People who need EU residence rights or a fast second passport
Key numbers at a glance.
- Corporate tax
- 10%
- flat; losses carried forward 10 years
- Dividend WHT
- 0%
- no withholding on dividends to non-residents
- Personal income tax
- 0–10%
- first €24,000 exempt; dividends from Andorran companies exempt
- IGI (VAT)
- 4.5%
- reduced rates 0–2.5%, 9.5% on banking services
- Setup time
- 2–3 months
- foreign-investment authorization, notary, registry, trade licence
- Running cost
- from ~€4,000/yr
- accounting and filings, plus local trade licence fees
- Minimum stay
- 183 days
- active residence; passive residence 90 days
- Residence entry cost
- €50,000
- non-refundable payment to the AFA since 13 February 2026
- Currency
- EUR
- via a monetary agreement with the EU
The Nerdy Index.
15 criteria, each scored 0–10 by a published formula or rubric. Pick who you are – the index re-weights what matters for you.
63Nerdy IndexFounder, moving with the company
57Company
68Residence
CompanyResidence
Company 57/100
Tax on distributed profits10% 7.5/10
Corporate tax plus dividend withholding on €100,000 profit paid out to a non-resident owner. Transparent entities (US LLC) pay nothing at company level – the owner pays at home, so they get a neutral 5.
Tax on reinvested profits10% 7.1/10
Tax while profits stay in the company (Estonia and Georgia: 0%).
Running cost~€4,000/yr 7.3/10
Typical yearly cost to keep a small trading company compliant: registered office, accounting, tax filings, audit if mandatory, government fees. Excludes local staff and office rent.
Context: Accounting, corporate tax and IGI filings for a small SL run about €2,400–3,000 a year, plus the parish trade licence and registry fees. The owner’s CASS contributions are extra.
Setup speed & remote formation~2 months 2/10
Typical working days from signed documents to a registered company. +1 point (max 10) if it can be done fully remotely.
Context: Foreign owners first need a foreign-investment authorization, then the notary deed, registry and a trade licence from the parish; two to three months is typical.
Banking accessNerdy assessment 4/10
How easy it is for a foreign-owned company to open and keep a business account (local bank or regulated EMI) that works for international payments.
Our assessment: A handful of conservative local banking groups; accounts usually need residence or a solid local link, in-person onboarding and extensive source-of-funds checks. Doable for residents, slow for everyone else.
Reputation & treaty network22 treaties, no lists 5.2/10
Number of double tax treaties in force, minus penalties for blacklists that make banks and tax offices nervous: EU list of non-cooperative jurisdictions (Annex I), EU watchlist (Annex II), FATF grey list.
Context: Andorra has 22 double tax treaties in force (Spain, France, Portugal, UK, Netherlands and others – not Germany) and is on no EU or FATF list, though banks still remember its past.
Substance burdenNerdy assessment 4/10
How much real presence (director, office, staff, board meetings) the company needs locally to be respected as tax resident there and to keep the bank happy. Higher score = lighter burden.
Our assessment: The company needs an Andorran address and trade licence, and the owner must actually run it from Andorra; since 2026 renewals check for real economic activity. No room for letterbox setups.
Residence 68/100
Personal tax for a new resident0% (dividends) 10/10
Effective tax a newly arrived resident pays on €100,000 of income from their own (foreign or local) company, using the best regime realistically available to an entrepreneur (non-dom, flat tax, territorial, special regime). Social security excluded.
Context: Resident owner taking €100,000 as dividends from their own Andorran company: exempt from personal income tax (after 10% corporate tax). A €100,000 salary would cost about 6.8%.
Residency accessNerdy assessment 4/10
How realistic it is for a non-EU entrepreneur to get a residence permit that also gives tax residency: requirements, cost, time, approval odds. EU citizens usually have it easier – noted in the reason.
Our assessment: Active residence is realistic but costly: €50,000 non-refundable, a real company, 183 days and only 150 foreign-investment slots in 2026. The passive route needs €1 million. EU/EEA citizens get priority in the quota, not an exemption.
Minimum stay183 days 4/10
Days per year you need to spend there to keep your permit and your tax residency (whichever is stricter, using the most flexible programme).
Context: Active residence – the route for entrepreneurs – requires living in Andorra more than 183 days a year. Passive and digital nomad residence need 90 days, but aren’t for running your own business.
Cost of living53.5 (Andorra la Vella) · Andorra la Vella 6.5/10
Numbeo Cost of Living Index (excl. rent, New York = 100) for the city most expats choose.
Context: Derived from Numbeo’s comparison with New York (New York 87% more expensive excluding rent, 2026) – few data points, so treat it as indicative. Rents are the real cost driver.
Safety89.3 (Andorra la Vella) · Andorra la Vella 8.9/10
Numbeo Safety Index for the same city (0–100, higher is safer).
Context: Numbeo Safety Index for Andorra la Vella, September 2026 – one of the safest places in Europe.
Rule of law & stability93rd percentile 9.3/10
World Bank Worldwide Governance Indicators, Rule of Law percentile rank (0–100). Measures how predictable courts, contracts and property rights are.
Context: World Bank WGI Rule of Law 2025: Andorra ranks around the 93rd percentile – small, stable and predictable.
English in daily life & business~540 (proxy) 5.6/10
EF English Proficiency Index score. Countries where English is an official or everyday business language count as 700.
Context: Andorra isn’t in the EF EPI; we use Spain’s 540 (France: 539). Daily life runs in Catalan, Spanish and French – English works in banks and with advisors.
Mobility & long-term optionsNerdy assessment 3/10
What the residence gives you beyond the country: Schengen/EU access, permanent residence and citizenship path, passport strength of a future citizenship, dual citizenship allowed.
Our assessment: Not EU or Schengen – the residence card gives no right to live elsewhere. Permanent status comes with long residence, but citizenship takes 20 years and requires giving up your other nationality.
Numbers checked October 2026. Click any row for the formula, our reasoning and the source. How the Nerdy Index works
Residency & visa routes.
Active residence (self-employed / foreign investment)
Set up an Andorran company, hold more than 34%, sit on the board and actually run it; live in Andorra 183+ days a year and pay into the CASS social security. Since Law 2/2026 the €50,000 payment to the Andorran Financial Authority (AFA) is non-refundable. 2026 quota: 150 permits for foreign investment, 30 for liberal professions, 20 for doctors.
Passive residence (no lucrative activity)
Invest €1,000,000 in Andorran assets (property only above €800,000 per unit) or €400,000 in the Housing Fund, pay €50,000 non-refundable (+€12,000 per dependant), show income of 300% of the minimum wage, hold health insurance and spend 90+ days a year. No work in Andorra.
Digital nomad residence
For remote workers of foreign companies: 90+ days a year, sufficient means, housing and private health insurance, with a favourable report from the economy ministry. Narrow and discretionary – not a route for your own company.
Employee residence
An Andorran employer hires you within the yearly work-permit quota. Cheap in fees, but tied to the job; Catalan tests at renewals.
Why Andorra5
- 10% corporate tax and tax-free dividends for residents from their Andorran company
- Maximum 10% income tax, no wealth, inheritance or gift tax
- IGI of 4.5% – one of Europe’s lowest consumption taxes
- Very safe, beautiful and close to Barcelona and Toulouse
- No longer on any EU or FATF list, with 22 tax treaties
Watch out for5
- €50,000 non-refundable to get residence, and limited yearly quotas
- Real presence required: 183 days and a company you actually run
- Housing shortage, high rents and extra tax for foreign property buyers
- Not EU or Schengen; citizenship after 20 years and only if you give up your old passport
- No tax treaty with Germany – German emigrants face extended tax liability for years
Andorra is the low-tax option for people who don’t want to move to another continent, or to a desert. Ten percent on company profits, zero on the dividends you pay yourself from your Andorran company, a 10% ceiling on income tax, no wealth or inheritance tax – in a safe mountain country three hours from Barcelona.
It’s also a country of fewer than 90,000 people with a limited supply of valleys, and it knows exactly how popular it has become. So it raised the drawbridge: since February 2026 residence costs a non-refundable €50,000, quotas are tight and the government checks that your business is real. This guide covers Andorra as of September 2026. General information, not tax or legal advice.
Is it for you?#
Andorra works for people who want to live there. It punishes anyone who treats it as a postal address with a view.
Who wins:
- Online entrepreneurs with a movable business. Agencies, software, e-commerce, content, trading: run it through an Andorran company, pay 10% corporate tax and take dividends tax-free. On €100,000 profit, €90,000 reaches you. Try that in Munich.
- Families who value safety and nature. Numbeo rates Andorra la Vella at 89.3 on safety. The biggest threat is a black run you overestimated. Skiing in winter, hiking in summer, good schools in three systems (Andorran, Spanish, French).
- Wealthy movers without a need for EU rights. No wealth tax, no inheritance tax, capital gains on small shareholdings largely exempt.
Who loses:
- The “letterbox” crowd. You must live there more than 183 days a year and run your company from Andorra. Renewals now check for real activity, and a coworking desk you visited twice won’t cut it.
- Budget movers. The €50,000 payment to the Andorran Financial Authority (AFA) is gone for good, rents are high and apartments are harder to find than a parking spot in Escaldes.
- Germans without a plan. There’s no tax treaty between Germany and Andorra. Leaving Germany for a low-tax country triggers extended tax liability rules for up to 10 years if you keep German interests (see the catches below).
- Passport collectors. Citizenship takes 20 years and you must give up your old nationality.
The company#
Entity types that matter#
- Societat Limitada (SL). The standard choice for small businesses. Minimum capital €3,000, fully paid in. At least one director; for active residence, you hold more than 34% and sit on the board.
- Societat Anònima (SA). Minimum capital €60,000; for larger or investor-backed companies.
- Liberal professional. Doctors, lawyers, architects and other regulated professions can get residence without a company, after validating their degrees – with a separate, smaller quota.
How €100,000 profit is taxed#
| Step | Amount |
|---|---|
| Profit | €100,000 |
| Corporate tax 10% | −€10,000 |
| Available for dividends | €90,000 |
| Personal tax on dividends from an Andorran company (resident) | €0 |
| Net to you | €90,000 |
Paid to a non-resident, Andorra doesn’t withhold anything either. What the owner’s home country does with it is another story, usually a less pleasant one. Prefer a salary? The first €24,000 is tax-free, then 5% up to €40,000 and 10% above: €100,000 of salary costs about €6,800 in income tax. Salaries also carry CASS social security (6.5% employee, 15.5% employer).
As an owner you’ll register as self-employed with the CASS anyway: roughly 22% on a declared base linked to average wages, which in 2025 meant about €140–780 a month. That buys you public healthcare and a pension record. Unlike most social contributions, you can see what you get. Compare the options in the tax calculator.
Setup, running costs and banking#
Foreign owners first need a foreign-investment authorization from the government, then a notary deed, registration and a trade licence from the parish (comú). Two to three months is normal; the permit and the company are usually prepared in parallel. Nobody here is in a hurry, and the rules make sure you aren’t either.
Accounting, the corporate tax return and quarterly IGI filings cost around €2,400–3,000 a year for a small SL; with licence and registry fees, budget about €4,000.
Banking is the slowest part. Andorra has a few conservative banking groups, and they act like it: onboarding is in person, source-of-funds checks go back further than your tax returns, and accounts for non-resident companies are hard to get. Plan for residence and company to move together, and keep an EU account for international payments. Our offshore banking guide explains the general playbook.
Substance#
This is not a place for virtual offices. Andorra has seen every letterbox trick and closed most of them. The company needs local premises and a licence, you need to run it from Andorra, and since Law 2/2026 renewals at two and five years check for genuine activity. The upside: if you live there, substance comes almost automatically.
Living there#
Residency routes compared#
| Route | Main requirements (2026) | Days | Work? |
|---|---|---|---|
| Active (self-employed / investment) | Andorran company, 34%+ and director, CASS, €50,000 non-refundable, quota of 150 | 183+ | Yes, in your company |
| Liberal professional | Validated degree, professional registration, quota of 30 (+20 for doctors) | 183+ | Yes |
| Passive | €1,000,000 invested (or €400,000 in the Housing Fund), €50,000 non-refundable (+€12,000 per dependant), income of 300% of the minimum wage | 90+ | No |
| Digital nomad | Remote job for a foreign company, sufficient means, economy-ministry approval | 90+ | Only for foreign employer |
| Employee | Job offer within the work-permit quota | 183+ | Yes |
Quota slots are allocated in order of application, with citizens of treaty countries and then EU/EEA citizens prioritized. The first permit runs one year, renewals 2 + 2 + 2 years, then 10.
Personal tax#
You’re Andorran tax resident with more than 183 days a year, or if your main economic interests are there. Income tax is 0% up to €24,000, 5% to €40,000 and 10% above. Savings income: the first €3,000 exempt, then 10%; dividends from Andorran companies are fully exempt. Foreign dividends are taxed at 10% with credit for foreign withholding under a treaty – without one (the US, Germany), foreign withholding can exceed the Andorran tax. There’s no wealth, inheritance or gift tax. Your heirs will approve.
Daily life#
Andorra la Vella and Escaldes-Engordany form one small city in a narrow valley; most other villages are ski or hiking bases. Everyday costs are moderate (Numbeo indicates around 53 on its cost-of-living index excluding rent) and the IGI of 4.5% keeps shopping cheap. Housing is where it hurts: supply is limited, rents have climbed, and since 2026 foreign investors pay an extra 6–10% property tax unless they’ve lived there three of the last ten years.
Catalan is the official language; Spanish and French are everywhere, English works with banks and advisors. The nearest big airports are Barcelona and Toulouse, around three hours by road. Winters are real winters. Budget for snow tyres, not for flip-flops.
The catches#
What can go wrong
01
The €50,000 is gone.
Since 13 February 2026 the AFA payment for active and passive residence is non-refundable, except when the initial application is refused.
02
No treaty with Germany.
Germans moving to Andorra face §2 AStG extended limited tax liability for up to 10 years if they keep substantial German economic interests, plus the exit tax on company shares. Plan this before you move, not after the first letter from the Finanzamt.
03
Old company, old management.
Keep running your German GmbH from Andorra and Germany still taxes it; run your Andorran company from Germany and Germany taxes that too. See place of management and CFC rules.
04
Quota and timing.
150 foreign-investment slots for 2026. A pre-reservation must be followed by the investment within six months.
05
Housing.
Scarce, expensive, and foreign buyers face quotas and an extra property tax. Welcome, now please pay.
06
No EU rights.
An Andorran residence card doesn’t let you live elsewhere in Europe. Non-EU citizens should check visa rules for travelling through Spain and France.
Step by step#
From decision to Andorran resident
Check your home-country exit first
Exit tax, extended tax liability and existing companies decide whether Andorra works. Our leaving Germany guide covers the German side.
Find housing
A long-term rental or a purchase. You’ll need it for the application.
Reserve a quota slot and apply for the foreign-investment authorization
For active residence, the company plan and the residence application go together.
Pay the AFA contribution and file for residence
€50,000 non-refundable, plus health checks, criminal records and proof of means.
Incorporate the SL and get the trade licence
Notary, registry, parish licence, bank account, CASS registration.
Move, register in the parish and start the clock
Register with the comú, live there 183+ days and keep records – the renewal will ask.
FAQ#
Can I live in Andorra and keep my company abroad?
Technically, but it defeats the purpose: a foreign company you run from Andorra is managed from Andorra, and the active residence permit requires an Andorran company you run.
Is Andorra still a tax haven?
Not by the lists: it signed up to automatic exchange of information (CRS), has 22 tax treaties and is on no EU or FATF list. It’s a low-tax country with real rules now, and it enforces them.
Can EU citizens move freely?
No. Andorra isn’t in the EU; EU/EEA citizens need the same permits, with priority in the quota order.
How long until an Andorran passport?
20 years of residence (10 if you went to school there), and you must renounce your other nationality.
Comparing Andorra with Cyprus, Malta or Switzerland? Try the Jurisdiction Finder or book a strategy session. Checked September 2026 – general information, not tax or legal advice.
Sources#
- Govern d’Andorra – personal income tax
- Law 5/2014 on personal income tax
- Govern d’Andorra – digital nomad residence
- Andorran Banking – double taxation treaties
- CASS – self-employed contributions
- Augé – Omnibus Law 2
- Augé – passive residence
- Andorra Solutions – self-employed quota 2026
- Elysium Consulting – company running costs
- Numbeo – Andorra la Vella
Sources & fact check.
Every number on this page comes from one of these. Last checked October 2026. Tax law changes – confirm with a licensed advisor before acting. Nothing here is tax or legal advice.
- Official Govern d’Andorra – personal income tax (IRPF) income tax rates, dividend exemption e-tramits.ad
- Official Govern d’Andorra – digital nomad residence nomad residence, 90 days e-tramits.ad
- Official Govern d’Andorra – double tax treaties treaty network govern.ad
- Official Andorran Banking – double taxation treaties 22 treaties in force andorranbanking.ad
- Official CASS – self-employed contributions social security for the self-employed cass.ad
- Law Law 5/2014 on personal income tax (consolidated) IRPF brackets and exemptions portaljuridicandorra.ad
- Advisor Augé – Omnibus Law 2 (Law 2/2026) non-refundable €50,000, €1m passive threshold, property tax augelegalfiscal.com
- Advisor Augé – passive residence 2026 passive residence requirements augelegalfiscal.com
- Advisor Andorra Solutions – self-employed residence quota 2026 2026 quotas, active residence andorra-solutions.com
- Index Numbeo – Andorra la Vella safety, cost of living numbeo.com
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